Apple avoids EU lawsuit by opening up iPhone payment system to rivals
The European Union (EU) has accepted Apple's proposal to open up its payment system technology. Because Apple only allowed contactless payment processing on iPhones and other devices using its own 'Apple Pay,' the EU deemed this anti-competitive behavior and could have imposed heavy fines.
Apple settles EU case by opening its iPhone payment system to rivals | Apple | The Guardian
iPhones and Apple Watches are equipped with NFC chips that enable contactless payments, but for security reasons Apple does not allow third-party clients to make contactless payments and has limited the use of the feature to its own 'Apple Pay.'
However, these regulations were deemed anti-competitive by the EU and an investigation was ongoing. If found in violation, Apple could have been fined up to 10% of its global sales, so Apple later submitted a proposal to the EU to 'open up NFC payment technology to third-party companies' in an attempt to circumvent the regulations.
Reports that the EU will accept Apple's proposal to open up iPhone's NFC payment technology to rivals; investigation could be completed as early as May, avoiding heavy fines - GIGAZINE
On July 11, 2024, the EU announced that it would accept the proposal and make the final proposal, which fine-tuned Apple's draft proposal, legally binding. Margrethe Vestager, Vice-President of the European Commission, said, 'Today's commitment marks the end of the Apple Pay investigation. This agreement marks an important change to Apple's business in Europe, benefiting competitors and customers.'
Apple said it would make its technology available to developers in the European Economic Area to enable contactless payments, as well as the use of NFC on car keys, employee ID cards, hotel keys, concert tickets and more.
Vestager said iPhone users would be able to make contactless payments using their wallet app of choice, and developers would be able to use iPhone authentication features like Face ID -- but only within the EU.
Analysts say there is a big economic incentive for businesses to use their own wallets, which could result in savings that can be passed on to consumers. The Justice Department said Apple charges banks a 0.15% fee for each transaction.
Apple has until July 25, 2024 to open up its payments system in all 27 EU countries, as well as Iceland, Norway and Liechtenstein.
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